Daniel Manac Case

1282 Words Oct 24th, 2011 6 Pages
Daniel Dobbins Distillery, Inc

Case Study Analysis



WMP 7078

Various Cost that can be included in Dobbins’s Inventory

It has been argued that all costs incurred by company can be included as part of Manufacturing costs. This is debatable question but usually in a manufacturing company there is a manufacturing cost and period cost where only manufacturing cost is inventoriable. Anything that is not integral part of final product is considered period cost and it is management decision (but rational decision) based on the business and the form in which product is sold, to decide on the criterion.

So basis for all decision is to first identify all cost and the define criterion for product cost
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s charged to Inventory

[All figures are in ‘000s]

|Cost Item |Cost (1988) |Cost (1987) |Cost Difference |
|Barrel cost |3969 |2709 |1260 |
|Occupancy cost: Factory Building |297 |265 |32 |
|Occupancy cost: Rented Building |572 |272 |300 |
|Warehouse cost |334 |188 |146 |
|Chemical Lab expenses |166 |136 |30 |
|Depreciation costs: Factory Equipment |24 |24 |0 |
|Depreciation costs: Warehouse Equipment |20 |12 |8 |
|Government Supervision costs |14 |6 |8 |
|Bottling liquor costs |458 |458 |0 |
|Total |5854

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